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Search Beats Display: Microsoft Says Bing Is Sustainable & Standalone Multibillion Dollar Business
A rare reveal as Microsoft exit the display ads business highlights what a powerhouse Bing search apparently is.
Think search advertising is boring, and that it’s all about programmatic and display these days? Microsoft’s move today to dispose of its display business but keep search shows how powerful and unique search remains.
As announced today, Microsoft is ridding itself of its display ad sales business. That’s something it feels can be handled just as well by farming it out to AOL and AppNexus. But search is different. Search is important. Search is something that Microsoft has no plans to dispose of.
“We are deeply committed on the search side. We see it as a business that we’ve built out over the past six years as sustainable and standalone,” said Rik van der Kooi, the vice president who heads Microsoft’s ad business, when we talked today about Microsoft’s moves.
I wasn’t sure I heard correctly. Was van de Kooi saying that Bing really was making money now as a standalone business? That’s not something I’d recalled Microsoft saying before.
“It’s a multibillion dollar business, and it does pay for itself right now,” he reconfirmed. “Our commitment to Bing is very deep and therefor critical for us to continue to monetize that business,” he said, explaining how Bing is not just a service on its own but tied into all types of Microsoft products now, from phones to desktops to email.
That underscores how relatively rare search is, among providers. It makes up about half of online ad sales in the US, yet the inventory and ad sales platforms are largely controlled (in the US) by only three companies: Google, Bing and Yahoo. In contrast, if you want to make a display ad purchase, there are a dizzying array of platforms and providers all competing for your money.